Your grandfather has offered you a choice of one of the three following alternatives: $8,500 now; $3,500 a year for five years; or $47,000 at the end of five years. Use Appendix B and Appendix D. (Round "PV Factor" to 3 decimal places. Round the final answers to the nearest whole dollar.)

a-1. Assuming you could earn 9 percent annually, compute the present value for the following amounts.

	Present value
$8,500 now		$
$3,500 a year for five years		$
$47,000 at the end of five years		$

a-2. Which alternative should you choose?

multiple choice 1

• $47,000 received at the end of five years

• $3,500 received each year for five years

• $8,500 received now

b-1. If you could earn 15 percent annually, compute the present value for the following amounts.

	Present value
$8,500 now		$
$3,500 a year for five years		$
$47,000 at the end of five years		$

b-2. Which alternative should you choose?

multiple choice 2

• $47,000 received at the end of five years

• $3,500 received each year for five years

• $8,500 received now